Cadence Living Making Moves in Arizona
A Scottsdale, Arizona-based senior living operator is set for a major expansion into its home state, joining other builders in the booming Phoenix metro market. Cadence Living and its San Diego-based development partner Global Seniors Housing acquired the 7.7-acre plot in the town of Chandler (about 20 miles southeast of Phoenix) and is set to start construction on the project later this year. Estimated about a cost of $46 million, or about $240,000 per unit, the community will feature 191 units of independent living, assisted living and memory care services. The community will join Cadence’s brand-new community in Glendale, which opened this March with 165 senior living units, plus two... Read More »
A HUD Debacle With SNFs?
One major default is used to blast a very profitable arm of the government. I don’t know if anyone noticed the June 3 lead article in The New York Times business section, but the reporter, Matthew Goldstein, should have talked to more people. One company, Rosewood Care Centers, defaulted on $146 million in loans secured by 13 skilled nursing and assisted living facilities in Illinois and Missouri. According to the story, it now demonstrates the “problems plaguing the HUD program.” Plaguing? Give me a break. Yes, it may have been likely that the buyer of these facilities in 2013 had few financing options given the two states’ reimbursement history, but that is one reason why HUD is supposed... Read More »
REITs Are Moving Assets Again
Just when we thought it was safe to go outside again, it was revealed that Welltower had transferred the operations of 20 memory care and Alzheimer’s communities from one of its formerly favored tenants, Silverado Senior Living, to a formerly much smaller tenant, Frontier Management. These 20 properties represent 50% of Silverado’s memory care operations, and the transition is obviously a serious blow. To say that people were shocked by this development would be an understatement. Of the 20 properties, 11 are located in Texas and the rest scattered among four other western and midwestern states. We understand that sometimes a REIT or a lender has to make difficult decisions to protect its... Read More »
The Tale of Two SNFs
Every now and then, there is a transaction that really highlights the two diverging skilled nursing markets. On the one side are the older, traditional SNFs that struggle with high Medicaid censuses, rising physical plant costs and shrinking operating margins, and often end up selling for under $50,000 per bed, or lower. Then, there are the newer, transitional care facilities that accept almost exclusively Medicare or private pay patients and feature more home- or even resort-like amenities. Two of these kinds of facilities just secured bridge financing from Berkadia valued at over $285,500 per bed. Imagine what price they would command in the M&A market. Jay Healy of Berkadia’s... Read More »
CBRE Refinances California Community
A Bay Area senior living community recently refinanced with the help of the A-team at CBRE that included Andrew Behrens, Aron Will, Austin Sacco and Adam Mincberg. The borrower was a joint venture between northern California owner/operator Carlton Senior Living plus Piedmont Properties Group, a large multifamily/senior living investor. They bought the 153-unit independent living community in 2007 for approximately $17.65 million, or $115,400 per unit. Located in Concord, California, the property was originally built in 1991 less than two miles from the top-ranked adult specialty care hospital in the country, John Muir Medical Center. At the time of the acquisition, its debt (which included... Read More »
Marcus & Millichap’s Mom & Pop Sale
A local mom & pop sold its only skilled nursing facility in Lodi, California, and hired Rob Reis of Marcus & Millichap to seal the deal. Built in stages between 1956 and 1964, the facility features 86 licensed beds in 49 units, split between 14 private rooms, 27 shared rooms and six three-bed wards. There was also a secure dementia ward comprised of 18 beds. Occupancy was consistently in the mid-90s, with an approximate 70% Medi-Cal census, but there was also strong local competition, so cash flow was negative. The new owner should be able to take advantage of the steady income from the dementia unit, the quality physical plant and implementation of PDPM later this year to turn... Read More »
The Risk of Being Small in Seniors Housing
Size has consistently mattered when it comes to evaluating the risk of a seniors housing community, which includes independent living, assisted living and memory care. Bigger communities are able to use scale to trim expenses, which could be huge if you have to pay your employees a little more to both compete with other seniors housing competition or businesses in other sectors. Bigger communities, which are favored by institutional owners, can also absorb the pain of a few empty units better than smaller communities. That is not to say that smaller communities, with their “home-like” atmosphere and more personalized care, don’t have their advantages too. But the smallest communities,... Read More »
Recent Senior Care M&A Deals, Week Ending June 7, 2019
Check out our recent senior care M&A deals! Long-Term Care AcquirerTargetPrice Ventas, Inc.Canadian Seniors Housing Portfolio$1.8 billion National Health Investors, Inc.6 senior living communities$126.85 million The Ensign Group, Inc.Golden Palms Rehabilitation and RetirementN/A LECOM HealthVillage at Luther SquareN/A Greystone Healthcare Management Corp.The Ponce Therapy Care... Read More »
Flashback Friday: Brookdale Becomes King
Oh, how times have changed. And the mighty have fallen. Taking a look at the June issue of The SeniorCare Investor from 2006, what headline appears? “Brookdale Becomes King: Changing the Face of Seniors Housing.” Hindsight is 20/20, but there were already warning signs of Brookdale Senior Living’s bust as it was in the middle of a meteoric rise. Debuting on the New York Stock Exchange in November 2005 at $19.00 per share, Brookdale went on an acquisition spree in the months afterwards, culminating in its May 2006 acquisition of American Retirement Corporation for $33.00 per share, or $1.2 billion plus assumed debt and leases. Also coming along with the deal was ARC’s CEO Bill Sheriff, who... Read More »
Blueprint in the Buckeye State, Again
Blueprint Healthcare Real Estate Advisors announced a couple of Ohio closings at the start of June. The firm first sold an 88-bed skilled nursing facility in Orrville, a small town about 40 miles south of Cleveland. Originally built in 1974, the facility was recently renovated and also features two independent living cottages totaling eight units. However, it was operating around breakeven, so the existing owner/operator decided to divest. A partnership between a high-acuity skilled nursing operator and O&M Investments, a private equity firm focused on the SNF market, emerged as the buyer. Connor Doherty and Brian Payant led the transaction, which did not disclose a purchase price. Mr.... Read More »Schedule a demo
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